Unfortunately that a Handforth residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Handforth property market.Where your lease has approximately ninety years left, you need to start considering a lease extension. If lease term slips below eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Handforth will be able to extend under the legislation; however a lawyer will be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancer for the duration of the process.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Chelsea Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service gives you better control over the value of your Handforth leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of protracted discussions with the landlord of her two bedroom apartment in Handforth, Naomi started the lease extension process as the 80 year deadline was swiftly approaching. The transaction was concluded in January 2008. The landlord’s costs were kept to an absolute minimum.
Last Winter we were called by Mr and Mrs. W Davies , who purchased a ground floor flat in Handforth in June 2006. The question was if we could estimate the compensation to the landlord could be to extend the lease by 90 years. Similar homes in Handforth with 100 year plus lease were valued about £205,000. The mid-range ground rent payable was £50 billed annually. The lease terminated in 2105. Taking into account 79 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 plus costs.
In 2010 we were phoned by Dr A Nelson who, having owned a garden flat in Handforth in May 2006. We are asked if we could approximate the compensation to the landlord could be to extend the lease by an additional years. Similar premises in Handforth with 100 year plus lease were in the region of £275,000. The mid-range ground rent payable was £65 collected every twelve months. The lease lapsed on 2 August 2094. Taking into account 68 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of legals.